Development Direction of Vietnam's Motorcycle Manufacturing Industry in the Next 15 Years:

market after many companies such as Honda, SYM... but with its tireless efforts, Yamaha has risen to become the second largest motorcycle manufacturer in the country, just after Honda. The company's growth rate is about 20%/year, the number of vehicles that the company has sold in the market has reached 1.5 million units as of early 2007. To achieve these successes, Yamaha has flexibly and creatively applied Marketing mix activities throughout the entire business process.

- Yamaha has successfully implemented the strategy of "constantly innovating products". Therefore, Yamaha's products are always unique, have relatively high quality, outstanding technology content, are safe, and satisfy customers' needs. All products that have been launched and improved are well received by consumers. Manual motorbike products still account for the majority of Yamaha's products. The growth rate of manual motorbike products is 12%. Yamaha's most successful product is the scooter product. In 2006, the number of scooters produced was only 20%, but in 2007, it was 30% of the company's output. The company has launched 3 Mio models (in 2004) with a selling price of 17-18 million VND/vehicle and 3 improved Mio models (in 2007), which is the lowest scooter price in the market today. People with average incomes often have the only choice of Yamaha's Mio products. Nouvo is also a very popular scooter line of Yamaha. According to Mr. Dinh Ngo Tuan, Marketing Director of Yamaha, in 2006, 90,000 Nouvo scooters were sold, and in 2007, it is estimated that 110,000 scooters will be sold. In addition, about 30,000 Mio scooters were sold in 2006 and about 60,000 scooters in 2007, increasing the number of scooters sold by the company from 110,000 in 2006 to 160,000 in 2007.

- The company's pricing policy is relatively reasonable and achieves profit and sales targets. Most of the company's products are priced higher than directly positioned products because Yamaha's products always meet the needs for style and design at a higher level.

- Distribution policy: Yamaha has built a wide distribution network in the market (all provinces and cities in the country have exclusive Yamaha distributors with more than 200 large and small dealers) and many other

other retail outlets. The distribution system has become Yamaha's external competitive advantage.

Maybe you are interested!

- Promotion and business support policies are important strategies to build the Yamaha brand in the hearts of customers. Yamaha's promotion and business support strategies are often very timely and highly effective. In particular, since entering the Vietnamese market, Yamaha has participated in many social activities to build a Yamaha image that is close to the Vietnamese consumer community and the whole society.

2. Existing issues

Besides the very encouraging achievements, Yamaha still has some problems that need to be solved as soon as possible. These are:

- Regarding products: Yamaha only has 5 main lines of vehicles and gradually improves those products. For products such as Jupiter, Nouvo, although the improvements are outstanding, Yamaha does not completely change the product name, so many people (especially those who are less interested in motorbike products such as women) think that there is almost no significant improvement. This may have been suitable for the years before 2004 but is no longer suitable today. Meanwhile, direct competitor Honda has launched 2 new products in the past 2 years, Click and Air Blade. Other companies such as Hoa Lam Kymco have launched a series of high-end scooters manufactured and imported by this company and have begun to conquer the market: Jokey 125, Zing 150, Solona, Vivio... Not to mention other imported motorbikes that are increasingly popular with high-income customers. In addition, the Sirius line is increasingly being overshadowed by Honda vehicles such as the new Wave Alpha and the new Wave RS in terms of design, convenience and quality. On the other hand, due to the focus on product design and color, Yamaha is still considered to have products with quality not equal to Honda products, which is also an obstacle for Yamaha when developing new product lines with higher prices.

- The company's pricing policy still has some shortcomings. The company is not flexible with product prices, even for many years, when the market 64

Although there are many fluctuations, many products still maintain the same old price. For example, the company's Sirius product line still maintains the same selling price of around 16 million VND while many average products have been launched and the price is much lower such as the new Wave Alpha, Wave RS... The localization rate of products is still not high (about 40%) lower than other competitors: Honda (50%), domestic enterprises about 70%... so the product price is still high.

- The distribution system is widespread in the market but the quality of some dealers' operations is not high, not sensitive to the market. For example: in early and mid-2006, many customers stopped buying to wait for a sudden change in price when Vietnam joined the WTO and the regulation prohibiting vehicle registration in inner-city districts. After that time, Vietnam joined the WTO but did not cause much fluctuation in prices, the ban on motorbike registration in inner-city districts was lifted and farmers in the Central region and the Mekong Delta had a big harvest, the demand for vehicles near Tet suddenly skyrocketed. Many Yamaha dealers were short of goods, even out of stock and arbitrarily raised prices higher than the listed price. At that time, Yamaha did not fully anticipate the changes in the market to have measures to stimulate intermediaries to stockpile goods.

- It can be said that Yamaha's trade promotion activities are relatively successful. However, there is only one small drawback: the most effective advertising activities are those conducted by Yamaha Motor Co., Ltd., while those conducted by Yamaha Motor Vietnam are often less effective. Yamaha's advertising content on television and the Voice of Vietnam radio is still monotonous and does not really attract customers' attention. Promotion and PR forms have not been improved appropriately.

The above are the most general assessments of Yamaha's marketing mix activities, with many achievements but also some shortcomings. Moreover, with the increasingly fierce competition today, it is extremely important to propose solutions to overcome the shortcomings and further improve the marketing mix activities. Chapter 3 of the thesis will delve into this issue.

Chapter III‌‌

COMPLETE SOLUTION FOR MARKETING MIX ACTIVITIES OF YAMAHA MOTOR VIETNAM COMPANY

I. DEVELOPMENT ORIENTATION OF YAMAHA MOTOR VIETNAM

1. In the short term

- Business objectives:

The company aims for sustainable, long-term, profitable economic growth as planned. In addition to the profit target, Yamaha also aims to increase benefits for customers and employees working in the company. The company's social goal is that the company will create more good jobs for society, solve unemployment, and train skilled workers from unskilled workers. In addition, the company still maintains its target customers as middle and high income earners in society.

- Continue to develop and launch new scooter products:

In 2004, Mr. Takahiko Takeda, General Director of Yamaha Motor Vietnam affirmed: "Yamaha Motor Vietnam will continue to be a pioneer in introducing new products to the Vietnamese market. Yamaha Nouvo and Mio are scooter models with beautiful designs, easy to use and suitable for young people. In the near future, we will create a new trend in the motorbike market; scooter models are the turning point of Yamaha in the Vietnamese market". And in the following years, Yamaha will continue to implement the strategy of continuing to launch new scooter products and strong promotion and business support strategies for these products. In 2006, the ratio of scooters produced by the enterprise compared to total production accounted for 20%, in 2007 the target was 30% and in 2008 it was 40%.

- Strengthening Yamaha Motor Vietnam's relationship with dealers and customers:

Product introduction programs and exchange activities between dealers, customers and manufacturers are regularly organized by Yamaha in the two southern ends.

– North. This three-way connection is increasingly tightened by the manufacturer through events related to the product. During the recent Mio product introduction (March 2007), Yamaha Company conducted a road show to the provinces of the Mekong Delta and the North. Accompanying that was a test-drive program, music and fashion shows, and motor performances by professional athletes from Japan.

But that does not mean that Yamaha company stands still but is constantly moving, continuing activities to strengthen the link between manufacturer - customer - dealer. The company can use promotional tools and business support to achieve the goal of strengthening the above link. However, the most effective tool that Yamaha can use is public relations activities and attractive and highly engaging promotional programs.

- Increase the localization rate in products:

Yamaha Motor decided to establish Yamaha Motor Vietnam Parts Manufacturing Co., Ltd. to meet the rapid increase in motorcycle production demand at Yamaha Motor Vietnam as well as the demand for engine castings in Japan. This is the first casting parts manufacturing company established by Yamaha Motor Company (Japan) since 1996. Therefore, this company will provide Yamaha Motor Vietnam with a lot of spare parts, in the coming years the company will maximize the localization rate of products and can reduce product costs.

The Ministry of Planning and Investment has granted Yamaha a license to establish a new company specializing in the production of motorcycle engine components and spare parts in Hanoi. The factory was put into operation at the end of 2006. The new company has a charter capital of 14.3 million USD with an annual capacity of one million motorcycle engine castings, including cylinder heads and 900,000 steel components such as gears and transmission parts, partly for motorcycle assembly in Vietnam and partly for export to Japan.

- Increase vehicle production to meet the needs of the Vietnamese market and export:

Yamaha Motor Vietnam plans to increase its motorcycle production in Vietnam by 50% in the next three years to meet the country's growing demand. The world's second largest motorcycle manufacturer will invest 44 million USD to build a motorcycle factory in Nam Thang Long, Hanoi. The factory is expected to be operational in October 2008 and will be able to produce 700,000 motorcycles per year.

Yamaha representative said that currently the demand for motorbikes in Vietnam is increasing very rapidly due to the strong economic development. Therefore, investing in Vietnam is Yamaha's long-term business strategy. Therefore, within the next 3 years, Yamaha Motor Vietnam will have another new factory to produce and assemble motorbike products.

In addition to serving domestic demand, Yamaha will develop an export strategy within the next 5 years to suit world market demand and the general trend of Vietnamese motorcycle manufacturing enterprises.

- Continue the strategy of building Yamaha brand as "Brand of quality":

After 8 years of operation in the Vietnamese market, Yamaha has built a good image of its business. That is thanks to the good business process, high quality products launched to the market, the long-term advertising process "Yamaha - Brand of quality". However, an important factor in building an image of Yamaha, a business operating for the community, the greatest contribution is PR activities. Especially important in the company's future strategy is to maintain and develop the Yamaha brand in the market.

Yamaha's brand is determined by marketing mix strategies such as product strategy: improving product quality, design and features; improving distribution system; building the image of Yamaha for the development of the Vietnamese community...

2. In the long term

2.1. Development direction of Vietnam's motorcycle manufacturing industry in the next 15 years:

According to Mr. Kenichi Ohno, Professor at the National Institute for Policy Studies, Japan, the Vietnamese motorbike market is still growing quite rapidly, at a rate of about 25%/year. This is posing an important issue for management agencies in planning the development of the motorbike industry as well as other supporting industries.

Therefore, the question raised in recent times is "In the next 5-10 years, in which direction will the Vietnamese motorcycle industry develop?" In mid-September 2004, the Ministry of Industry approved the outline for the development strategy of the Vietnamese motorcycle industry until 2010 - vision to 2020. Accordingly, the State will not encourage the establishment of new motorcycle manufacturing enterprises but will encourage joint ventures and associations to form industrial-scale motorcycle and spare parts manufacturing corporations in the direction of high specialization and high cooperation, investing in high-level engine manufacturing technology, design consulting and technology transfer. The Ministry of Industry also proposed a development plan until 2010, the Vietnamese motorcycle industry must meet domestic demand of about 13 million units/year, export 300,000 units/year, the total vehicle localization rate will reach over 90%, and the engine localization rate will reach over 80%. The immediate goal is that by 2010, the Vietnamese motorbike industry will strive to meet 100% of the demand for popular vehicles in rural areas, 90% of the demand for motorbikes in urban areas; strive to achieve a domestic production rate of over 60% in the scooter segment, over 90% in manual transmission motorbikes; products will meet Euro 2 emission standards according to the roadmap set by the Prime Minister.

This is one of the goals that the Institute for Industrial Strategy and Policy Research set out in the Planning, with the condition that there is enthusiastic response from all relevant agencies, including State agencies, research institutes, financial institutions, supporting enterprises and motorbike manufacturing and assembling enterprises...

Regarding export targets, by 2010, we strive to achieve an export turnover of 300 million USD, of which 50% are complete vehicles and synchronous components; by 2015, this figure will increase to 500 million USD, including engines and motorbikes using "clean" fuel. This plan also outlines a bright future for the Vietnamese motorbike industry, which is to achieve an export turnover of 800 million to 1 billion USD by 2020. It is known that the export turnover of Vietnamese motorbikes in 2005 reached about 70 million USD and in 2006 reached 100 million USD.

Recently, based on the analysis of national and international data, the Institute for Industrial Strategy and Policy Research forecasts that the total number of motorbikes in the market will increase from 18 million (5 people/bike) in 2006 to a saturation level of about 33 million (3 people/bike) in 2020, similar to Thailand today. Meanwhile, the production and assembly capacity of enterprises is currently about 2 million motorbikes/year and will remain at 3.5 million motorbikes in the period 2010-2015.

In addition, according to the general assessment of manufacturers, the increasing demand for scooters will continue to increase due to its convenience and fashion. This type of vehicle is very easy to use, does not require a clutch, gears, a large storage box can hold many important things... Besides, this type of vehicle has many rich, unique, luxurious designs, suitable for the personality of the young generation, so it is increasingly popular, especially in urban areas where life and income are high.

Currently, scooters account for 20% of the motorbike market share, and it is predicted that in the next 5 years, scooters will account for 50% of the motorbike market share nationwide and the selling price will be even cheaper. Therefore, in the past 5 years, many companies have gradually shifted to producing scooters to meet the new needs of the market for scooters.

2.2. Development direction of Yamaha Motor Vietnam in the next 15 years :

Based on the development orientation of the entire Vietnamese motorcycle manufacturing industry and the company's own characteristics, the company has proposed long-term development directions for the company (from now until 2020).

Comment